Four years since the Covid pandemic hit the country, Americans are still dealing with the fallout. Between 2019 and 2020, our life expectancies actually went down by 1.8 years – the most it has declined since World War II. By 2021, the average life expectancy was down two years in a row – a decrease not seen in 100 years. In 2021, the average life expectancy was 76.1 years, the lowest it has been in 25 years. All this translates into the fact that in 2020 and 2021, more people died than were expected.
Epidemiologist, Katelyn Jetelina, broke down the statistic, showing how many unexpected deaths occurred week by week since the pandemic began, and compared it with death rates before the pandemic. Her figures show that the excess death rate – the number of deaths above “normal” – has been as high as 45% during the early pandemic, before vaccines.
In light of this, we were surprised to hear that one industry has not yet experienced much disruption: The life insurance industry is still living in a pre-Covid world. But experts told us big changes are on the way.
When we set out to write this article, we looked for people who have had Covid and long Covid whose life insurance premiums went up, or who had an application rejected. But we didn’t find a lot of evidence of this practice.
Brendan Bridgeland, an attorney and the policy director of the Center for Insurance Research, said that’s because compared to other types of insurance, life insurance changes very, very slowly.
“It’s designed so that you’re not thinking about payment or risk within the next 12 months,” he said in a phone interview. “Instead, it’s about ‘how is this going to look over a 30- or 40-year timeline.’”
That is, while Covid has made a global impact, it simply hasn’t been around long enough to affect the life insurance models and calculations yet. And even though 1-2% of people who get Covid die from it, he said, very few people have been denied coverage because of Covid, even if they’ve had it.
Questionnaire on risks
In life insurance, the common practice in the application process is to use a questionnaire to determine if a candidate poses an unusual risk of early death because of health issues. The same is generally true of disability insurance or long-term care insurance, where health issues might exclude an applicant or result in higher charges or earlier needs for services or payouts. This practice, called “underwriting,” uses such factors as age, gender, medical history and habits (like smoking), to determine the risk the company takes on by insuring you. Higher risk often means higher prices, and some people are completely denied.
In health insurance, the situation is different: The Affordable Care Act ruled out such questions for all A.C.A.-compliant policies – if you have health issues, an insurer cannot deny coverage or charge more, as they could and did before the Affordable Care Act.
Bridgeland’s assessment checks out with our experience. Despite weeks of searching, we were only able to find one person who had a Covid-related denial. A patient in the Pacific Northwest, who asked us not to use his name to protect his privacy, shared his denial letter from September of 2023 with us. It said:
“After careful consideration, we are unable to issue you a policy for which you applied. As a result, you have no coverage under this application with [redacted] Life Insurance Company.”
They explain why:
“We based our decision on records from Dr. [redacted] with SOB [shortness of breath], memory issues post COVID.”
The statement pointed out that he was denied because of post-Covid shortness of breath and memory issues, not simply because of Covid. The source of his medical problems was not a concern to the company. Caused by Covid or by something else, these things made the company feel he was too risky to insure.
‘A few more questions’
Matt Schmidt, an industry veteran and founder of Diabetes Life Solutions, a company that specializes in helping people with chronic health conditions get life insurance, said this is how he has seen these situations play out.
“I’m going to say most companies are asking [if you’ve had Covid] within 60 days,” he said. “If you answer yes, they’re going to ask you a few more questions.”
These follow-up questions would focus on any lingering effects that indicate long Covid or suggest lasting damage after the virus, he said.
“They’re going to ask you ‘have your doctors recommended seeing any specialists, you know a pulmonologist, the cardiologist?’” he said.
It is these assessments, he said, that will affect your life insurance application.
What you can do
“The best advice we can give is for an applicant not to think that a history of Covid will lead to a decline in life insurance coverage,” Schmidt said. “That’s a myth and a misconception that’s unfortunately going around.”
He told us that in most situations, a history of Covid will not lead to higher rates or having your application declined.
“We’d encourage anyone with a history of Covid to be 100 percent honest on their application for life insurance if a question is asked about if there is any history of Covid,” Schmidt said. “Companies will do background checks or possibly review health records so they will find this type of information out. Making a false statement on the application could lead to a decline, so please remember to answer all application questions honestly.”
Take care on your application
Bridgeland said: “In life insurance, the application is always important. But it’s also the area where you’ll get questions about Covid. I don’t think it’s something that will happen a lot, but it’s an area where if you make a mistake, or screw it up, even if it’s unintentional, it could cause you problems later on.”
Those problems might include your insurer contesting a claim.
“Contesting a claim in life insurance is always problematic, because it’s affecting family members,” he said. “And the person who knows the most about the circumstance might be deceased, because that’s the nature of life insurance.”
Schmidt said insurance companies you apply to want to make sure you’re following all of your doctor’s orders and instructions.
“If you do have some health issues and Covid is really impacting you, you better go do those follow-up appointments, or companies won’t even offer coverage at all,.” he said.